China Taiping Insurance Holdings Company Limited Interim Results Presentation. 23 August, 2018

Transcription

1 China Taiping Insurance Holdings Company Limited 2018 Interim Results Presentation 23 August, 2018

2 Forward-looking Statements This presentation and subsequent discussions may contain certain forward-looking statements with respect to the financial condition, results of operations and businesses of China Taiping Insurance Holdings Company Limited. These forward-looking statements represent the Company s expectations or beliefs concerning future events and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements 2

3 Simplified Company Structure Note (1):Ageas owns the remaining 24.9%, 20% and 20% equity interests in TPL, TPFS and TPAM, respectively. Note (2):PT Megah Putra Manunggal owns the remaining 45% equity interest in TP Indonesia. Note (3):TPSM and TPR (BJ) are wholly-owned subsidiaries of TPL. CTIH s effective interest in TPSM and TPR (BJ) is 75.1%. Note (4):TPIH (HK) and TPL own 61% and 39% of the equity interests of TPR (SH), respectively. CTIH s effective interest in TPR (SH) is 90.3%. Note (5):TPL, TPI and TPPM own 60%, 20% and 20% of the equity interests in TPR (Suzhou), respectively. CTIH s effective interest in TPR (Suzhou) is 85.1%. Note (6):TPL and TPI own 80% and 20% of the equity interests in TPR (Nanning), respectively. CTIH s effective interest in TPR (Nanning) is 80.1%. Note (7):Sinopec Group Company owns the remaining 50% equity interests in TSFL. Note (8):TPL and TPI own 60% and 40% of the equity interests in TPIH, respectively. CTIH s effective interest in TPIH is 85.1%. Note (9):In addition to operating its own business lines, TPIH (HK), TPSM and TPP also act as investment platforms in the asset management business. Note (10):Starr Insurance Holdings, Inc. owns the remaining 49% effective equity interests in TP Starr Insurance Agency. Note (11):The above structure was as of 30 June

4 Highlights and Consolidated Results of Operations Operating Profit Grew Rapidly and Overall Strength Continuously Enhanced Profit attributable to owners was HK$5.209 billion, increased by 120.3% over the Last Period Total premiums written and policy fees reached HK$130.1 billion, increased by 14.1% over the Last Period Total assets were HK$724.0 billion, increased by 8.6% over the 2017 year-end Group embedded value per share attributable to owners was HK$37.4, increased by 7.2% over the 2017 year-end figure of HK$34.9, while TPL s embedded value increased by 10.3% over the 2017 year-end 4

5 Highlights and Consolidated Results of Operations (Cont d) PRC Insurance Businesses Scale Outperformed the Market, Quality of Business Continued Improving Direct premium of the life insurance increased by 3.0% over the Last Period, 11.5 percentage points higher than market average First year premium from individual insurance decreased by 9.2% over the Last Period, outperforming major peers; individual insurance agents increased by 6.6% over the 2017 yearend, with growth rate leading its major peers Four persistency ratios of the individual agency and bancassurance channels were industryleading; renewal premium increased by 49.2% over the Last Period Single premium business of bancassurance has been cancelled and fully transformed to regular premium business, new business structure has been optimised significantly Long term employee benefit of group business increased by 47.8% over the Last Period, with regular premium increased by 58.8% over the Last Period Direct premium of the PRC property and casualty insurance increased by 16.8% over the Last Period, 2.6 percentage points higher than market average, achieving continual underwriting profit Note: All data related in this page is stated in RMB, if not specified 5

6 Highlights and Consolidated Results of Operations (Cont d) Oversea Insurance Businesses Developed Rapidly, Strength of International Operations Continued Enhanced CTPI (HK) s direct premium growth rate surpassed the market average and achieving continual underwriting profit TPL (HK) achieved a premium income of HK$1.027 billion and further enhanced its overall strength TP Macau s premium income sustained its market leadership, with a combined ratio of 64.7% and continuous outstanding underwriting result TP Singapore s premium income outperformed the market, with rapid premium growth in offshore business, while maintaining underwriting profitability TP UK s new business segment has achieved remarkable results, with premium increased by 75.3% over the Last Period TP Indonesia s combined ratio at 50.1%, underwriting profitability maintained at an excellent level TPRe maintained No.1 in the Hong Kong reinsurance market, with premium growth of 30.1%. The property and casualty reinsurance business grew by 41.6% over the Last Period, with combined ratio remained at a relatively good level 6

7 Highlights and Consolidated Results of Operations (Cont d) Steady Growth of Investment Asset Scale, Investment Income Significantly Increased over the Last Period The asset scale achieved a steady growth. At the end of June, the total investment assets of the Group is HK$577.0 billion, increased by 6.9% over the 2017 year-end; asset under management from third-party asset management business amounted to HK$424.5 billion, increased by 2.4% over the 2017 year-end Investment income increased significantly over the Last Period. During the first half of 2018, the Group recorded an investment income of HK$ billion, representing a growth of 56.9% over the Last Period, and net investment income of HK$ billion, representing an increase of 27.8% over the Last Period, which indicates that the Group has well coped with the market fluctuations and laid the foundation of its income growth base Traditional and alternative investments were prudent and active. During the first half of 2018, traditional investments outperformed the market, PRC equity investment yield outperformed CSI 300 by 2.96 percentage points; PRC held-for-trading and available-for-sale bond portfolio outperformed the CSI Bond Fund Index by 1.08 percentage points; alternative investments were inline with national strategies, which gained good returns and social effect Fixed income asset s credit risk were relatively low. High proportion of PRC bonds investment were with high credit ratings, the Group s credit risk screening results shows solid credit risk management 7

8 Highlights and Consolidated Results of Operations (Cont d) Pioneering and Deepening of the Group Strategic Cooperation and Crossselling Initiatives In the first half of 2018, China Taiping signed Group Strategic Cooperation Agreements with China National Aviation Fuel Group. As at the end of June, China Taiping had established strategic cooperation relationships with 85 large clients Our cross-selling initiatives achieved HK$3.637 billion insurance sales, including HK$2.913 billion of property insurance sales through TPL, HK$627 million of pension sales through TPL, HK$73 million of property insurance sales through TPP and HK$24 million of pension sales through TPI 8

9 Net Profit by Business Segment HK$ million 1H2018 1H2017 (Restated) Change Life insurance 5, , % Pension and group life insurance % PRC property and casualty insurance % Overseas property and casualty insurance % Reinsurance % Asset management business % Others* (32.21) % Net profit from operations 6, , % Non-controlling interests (1,667.11) (722.40) % Net profit attributable to the owners 5, , % * Others mainly include the operating results of the holding company, TPFS, TPIH (HK), TPFH and consolidation adjustments 9

10 Life Insurance Business Review TPL TPL (HK) Note: The Group holds 75.1% of the equity interest in TPL, and 100% in TPL (HK) The following figures are the results of TPL and TPL(HK) from its operations, before intra-group eliminations 10

11 TPL: Premium Growth Outperformed the Market; Solvency Remained Healthy Direct Premiums Written Comprehensive Solvency Ratio ( HK$ million) +11.9%* 99, % 235% 89,267 C-Ross 1H2017 1H2018 At 31 Dec 2017 At 30 Jun 2018 * Increasing by 3.0% calculated in RMB 11

12 TPL: Structure of Gross Premiums By Distribution Channels Further Increase in Proportion of Individual Business (HK$ million,%) 2% 2% 36% 19% 1H2017 1H2018 Group and other channels* 1,358 2,243 62% 79% Bancassurance Individual 32,371 19,259 55,538 78,392 1H2017 1H2018 * Other channels is mainly telemarketing 12

13 TPL: Persistency Ratios Kept Leading the Industry Individual Bancassurance Persistency ratio 13th month Persistency ratio 25th month Persistency ratio 13th month Persistency ratio 25th month 95% 96% 97% 94% 96% 96% 92% 94% 92% 94% 89% 89% At 31 Dec 2016 At 31 Dec 2017 At 30 Jun 2018 At 31 Dec 2016 At 31 Dec 2017 At 30 Jun 2018 Note: According to communications with peers, TPL was No.1 in both Individual and Bancassurance Channels in terms of 13th month persistency ratio 13

14 TPL: Growth of In-Force Business Promoted Growth of Embedded Value Embedded Value (HK$ million) 117, % 129,418 51,538 Adjusted Net Worth 47, % In-force Business Value 69,611 77,880 偿二代 At 31 Dec 2017 At 30 Jun

15 TPL: New Business Value Slightly Decreased Due to the Scale of New Policies; NBV Margin Kept Improving New Business Value NBV Margin (HK$ million) 8, % 7, pp 29.9% 27.7% C-Ross C-Ross C-Ross 1H2017* 1H2018 1H2017 1H2018 Note: the major economic assumptions and methodology used in the calculation of new business value in the first half of 2017 were consistent with current assumptions and methodology, hereinafter inclusive unless otherwise specified 15

16 TPL Individual Channel: First Year Premium Declined Slightly; Proportion of Protection Business Further Increased First Year Premium (HK$ Million) First Year Regular Premium Structure (%) 22, % 22, % 55.3% 66.4% 0.1% 55.9% 55.7% Short term savings Long term savings 29.4% +6.5pp 35.9% Long term protection Others 4.1% 8.2% 1H2017 1H2018 1H2017 1H

17 TPL Individual Channel: First Year Premium for Health Insurance Grew Substantially and its Proportion Increased Significantly Individual First Year Premium Structure (%) Individual Health Insurance First Year Premium (HK$ Million) 18.6% +22.7pp 41.3% 9, % 81.4% 58.7% Health Insurance 4,186 Others 1H2017 1H2018 1H2017 1H

18 TPL Individual Channel: Critical Illness Insurance New Business Grew Rapidly; Actual Experience and Pricing Assumption for Insurers Age Closely Matched Year Distribution of Critical Illness In-force Business Insurers Age Distribution of Critical Illness In-force Business 17.3% 12.0% 6.1% 7.5% 10.3% 14.9% 25.7% 24.1% 46.0% 36.2% 30.2% 7.3% 14.2% 21.9% 26.4% 2.6% 7.4% 4.4% 12.1% 16.5% 22.6% 23.4% 24.6% 16.0% 29.0% 16.3% 10.1% 14.9% 8.7% 7.2% 35.8% 29.5% 18.9% Coverage Premium Policy Year 1 Year 2 Year 3 Year 4 Year 5 and above Coverage Premium Policy Age 0-9 Age Age Age Age Age 50 and above Note: 1. based on all in-force critical illness insurance policies as of 30 Jun Figures may not match totals due to rounding 18

19 TPL Individual Channel: Agency Force Continually Increased; High Productivity Agents Decreased Slightly Number of Agents Number of High Productivity Agents* (person) (person) 384, % 409,486 10, % 9,483 At 31 Dec 2017 At 30 Jun 2018 At 30 Jun 2017 At 30 Jun 2018 * High productivity agent refers to agent with RMB300,000 FYP and above 19

20 TPL Individual Channel: Agency Force Trend and Development After manpower integration in the first quarter, total agents of individual insurance had achieved breakthrough growth since April 2018, reaching 409,486 as of the end of June Paying highly attention to foundational management, advocating effective recruitment and improving new agent retention to continually promote the effectiveness of the Basic Law and build a multi-channel sales force Creating a 12-month production line for new staff and promoting standard training to improve the self-management ability of supervisors and establish an "effective" workforce Thousand Agents

21 TPL Individual Channel: Key Indicators Key Indicators 1H2017 1H th Month Retention Rate 82.0% 78.2% 13 th Month Retention Rate 48.7% 48.0% 24 th Month Retention Rate 24.0% 27.8% Monthly Overall Activation Ratio 56.4% 52.9% Agents With Monthly RMB 10K Sales (Regular Premium) 73,321 80,476 Agents With Annual RMB 1MM Sales (Regular Premium) 2,446 2,283 Note: 1. Productivity data in this page is stated in RMB 2. Data from this page to page 22 is from traditional individual channel and does not include the Sinopec gas station project 3. Regular premium in this page is company s assessment indicator, which is calculated as FYP+Single Premium*0.1 21

22 TPL Individual Channel: NBV Margin Remained Relatively Stable Individual NBV Margin 34.6% -0.6pp 34.0% 1H2017 1H

23 TPL Bancassurance Channel: Fully Transformed to Regular Premium Business; Business Structure Improved Significantly First Year Regular Premium Premium Structure (HK$ million) (%) 4, % 3, % 18.2% 34.4% 52.1% 81.7% First year regular premium Renewal regular premium Single premium 0.1% 1H2017 1H2018 1H2017 1H

24 TPL Bancassurance Channel: Stick to Value Growth With full transformation to regular premium for bancassurance in the first half of 2018, regular premium increased by 24.0% as compared with the last period and accounted for 99.9% of the total premium (HK$ million) 1H2017 1H2018 YoY Growth Percentage Single Premium 16, % 0.1% Regular Premium 15,507 19, % 99.9% 24

25 TPL Products : Promoted Product Structure Transformation towards Value Growth; Promoted Normal Operation of Individual Long-term Protection Business by Focusing on Customers Health Protection Needs Long-term Protection Products FYP 6, % 7,908 (HK$ million) In 1H2018, our insurance continued to focus on the needs of our customers for health protection. We promoted normal operation of long-term insurance products, and achieved a steady growth in sales Among the top five selling products during the 1H2018, we have three long-term protection products for critical illnesses 1H2017 1H2018 Note: Long-term protection products refer to the products of illness insurance, accident insurance, term life insurance and whole life insurance with an insurance period of more than one year 25

26 TPL Products : Promoted Product Structure Transformation towards Value Growth; Business Mix Outperformed the Market Bancassurance Regular Products Structure 43.5% 9.7% 46.8% Bancassurance was concentrating on developing regular premium in 2018 For regular premium business, long-term products dominate, with 10 years and above products accounted for 43.5%, outperformed the market 5-9 years 10 years above Others 26

27 TPL Products: Focus on Support Growth of Core Value Business and Improvement of Quality Individual Product Bancassurance Product Focusing on customer demand for health protection to continuously optimise product structure and support synergetic development between scale and value Strengthen the innovation of protection products, increase the supply of products, continue brand building and business development Make great efforts to develop regular premium business, especially core value regular premium products By meeting the needs of customers in wealth inheritance, retirement savings and health protection, enrich and improve product types 27

28 TPL (HK): The Ranking and Influence Improved In 1H2018, TPL (HK) achieved a premium income of HK$1.027 billion and further enhanced its overall strength The direct premiums written including universal life premiums achieved HK$3,839 million, representing an increase of 237.1% compared with the Last Period The ranking and influence continued to improve with asset scale exceeding HK$20 billion Direct Premiums Written* Total Assets 1, % (HK$ million) 1,027 (HK$ million) 20, % 11,578 1H2017 1H2018 At 31 Dec 2017 At 30 Jun 2018 * Does not include universal life premiums 28

29 Mainland P&C Insurance Business Review TPI Note:The Group holds the 100% equity interest of TPI The following figures are the results of TPI from its operations, before intra-group eliminations 29

30 TPI: Premium Growth Outperformed the Market; Solvency Remained Sufficient Direct Premiums Written Comprehensive Solvency Ratio (HK$ million) +26.8% 15, % 203% 12,082 1H2017 1H2018 At 31 Dec 2017 At 30 Jun

31 TPI: Combined Ratio Kept Stable; Continued Making Underwriting Profits Combined Ratio Trend of Combined Ratio Expense Ratio Loss Ratio 98.8% 99.5% 99.8% 99.8% 99.8% 99.5% 99.5% 49.9% 46.5% 48.9% 53.0% At 30 Jun 2017 At 30 Jun At 30 Jun

32 Overseas P&C Insurance and Reinsurance Businesses Review HK & Macau CTPI (HK) TP Macau Overseas TP Singapore TP UK TP Indonesia Reinsurance TPRe TPRe (China) Note:The Group holds 55% of the equity interest in TP Indonesia, and 100% in the other companies listed above The following figures are the results of each company from its operations, before intra-group eliminations 32

33 Overseas P&C Insurance and Reinsurance: P&C Premiums Steady Increasing; Reinsurance Developed Rapidly Overseas P&C Direct Premiums Written (HK$ million) Reinsurance Premiums Written* (HK$ million) 1H2017 1H2018 Non-life +16.3% 8,538 Life 2, % 1, % 6,565 1,212 1, % 4,010 5, ,555 2,861 Overseas P&C HK & Macau Other Overseas 1H2017 1H2018 * Including business of TPRe (China) and excluding universal insurance 33

34 Overseas P&C Insurance and Reinsurance: Combined Ratios Increased; Continued to Maintain Overall Underwriting Profitability Combined Ratio +2.2pp +0.2pp +5.0pp +2.8pp 94.2% 96.4% 94.9% 95.1% 92.9% 97.9% 94.0% 96.8% Overseas P&C and Re HK & Macau Other Overseas Reinsurance* 1H2017 1H2018 * Non-life reinsurance business 34

35 Pension and Group Insurance Businesses Review TPP Note: The Group holds 100% of the equity interest in TPP The following figures are the results of TPP from its operations, before intra-group eliminations 35

36 TPP: Premium Income and Assets Under Management for Annuity Kept Steady Growth Premiums Written (HK$ million) Annuity Entrusted Assets (HK$ million) Annuity Invested Assets (HK$ million) 3, % 3, % 72,357 75,373 92, % 92,828 1H2017 1H2018 At 31 Dec 2017 At 30 Jun 2018 At 31 Dec 2017 At 30 Jun

37 Investment 37

38 Allocation of Group s Insurance Funds Insurance Funds Allocation 539, % (HK$ million) 577,035 At 31 Dec 2017 At 30 Jun 2018 % of Total At 31 Dec 2017 At 30 Jun 2018 Fixed income 79.0% 81.0% Debt securities 45.4% 47.4% Term deposits 9.9% 10.7% Debt products 16.6% 14.8% Other fixed income investments 7.1% 8.1% Equity investments 14.0% 16.1% Equity securities 4.8% 5.6% Investment funds 2.2% 3.0% Other equity investments 7.0% 7.5% Investment properties 3.7% 3.5% Cash, cash equivalents and others 3.3% -0.6% Cash, cash equivalents 5.3% 3.5% Securities purchased under resale agreements/ securities sold under repurchase agreements -2.0% -4.1% Total 100.0% 100.0% Note: Excluding funds used in operations, which includes cash, demand deposits and term deposits, of HK$9.78 billion (2017 yearend: HK$7.26 billion), and the effect of consolidation adjustment 38

39 Investment Income 56.9% 13, (HK$ million) 8, ,718 12,416 Net Realised and unrealised investment gains 1 Net investment income 2 Annualised total investment yield 4 (1,325) 1H2017 (Restated) 1H % 4.40% Note: 1. Including the income from the spread of investment securities, gain or loss on changes in fair value and impairment loss 2. Including the interest income from deposit, interest income from bonds, dividends from equity investments, rental income from investment properties and deducting interest expense on securities sold under resale agreements 3. Including interest generated from funds for daily operations, but excluding income from insurance asset management products, funds, equity schemes that has been classified as share of results from associates and joint ventures 4. In the calculation of investment yield, as the denominator, the average investment assets takes into account the effect of securities purchased under resale agreements and securities sold under repurchase agreements. When annualising the investment yield, the interest income from deposit, interest income from bonds and rental income from investment properties and deduction of interest expense on securities sold under resale agreements were multiplied by two, while the dividend from equity investments remained unchanged. 39

40 Debt Investments: High Credit Ratings of Debt Asset PRC bonds investment represented 83.7% of the total debt investment. Within the PRC bonds, 99.7% were high rating bonds, such as government bonds, financial policy bonds, interbank deposits, bonds with AAA ratings and A-1 short-term financing bonds. Investment grade bonds with BBB ratings or higher reached 100% Credit Ratings of PRC Bonds 43.7% 30.0% 24.0% 1.8% 0.3% 0.2% Government Bonds Financial Policy Bonds Interbank Deposits AAA AA+ A-1 Foreign bonds investment constitutes 16.3% of the total debt investment, of which 71% were investment grade with international ratings, while the remaining were issued by government and large corporations, with adequate credit enhancements 40

41 Alternative investments proportion decreased slightly, with structure improved Alternative Investments Alternative investments held by the Group amounted to HK$148.7 billion, representing approximately 20.5% of the total assets. From which the ratio of trust products and special asset support plan financial products increased The credit ratings of the PRC financial investment debt products remained relatively high, products rated AAA accounted for 93.6%, products rated AA+ accounted for 6.4% Alternative investments risk remained at a low level Allocation of alternative investments Regarding asset types, infrastructure creditor s scheme and real estate creditor s scheme accounted for 42.1%, trust plans accounted for 33.1%, asset management products and asset support scheme took a share of 11.8%, and the rest of 13.0% are overseas bond fund and convertible bonds In terms of credit enhancement, quasi central government debts/bank guarantee and credit enhancement free products cover 25.4%, large-scale enterprise guarantee covers 13.1%, local state-owned enterprise and other guarantee products 43.0%, mortgage/pledge products 14.8%, the others 2.8%, and non-credit enhancement only 0.9% Real Estate Financial Investment Debt Products Real estate financial investment debt products of approximately HK$18.8 billion, represented only 2.6% of the total assets The credit ratings of the real estate financial investment debt products were relative high, with major projects located in tier 1 or developed tier 2 cities Purchased External Financial Products Purchased external financial products of about HK$34.2 billion represented 4.7% of the total assets, the ratio decreased by 0.1 percentage point over the 2017 yearend Within the purchased external projects, 97.8% of them were with AAA ratings, mainly were from real estate, transportation, non-bank financial industry etc Note: Including exposures to each other, which is not directly in the total 41

42 Outlook 42

43 Outlook In-depth Implementation of the Top-Quality Strategy and Strive to Build the Four Taiping Currently, China insurance industry is at a period with important development opportunities. Taking TPG being one of the Fortune Global 500 as a new start, China Taiping will continue promoting the Top-quality Strategy, seek progress along with stability, adhere to quality development and the customer-oriented strategy to take great efforts to develop the core business, promote reform and innovation as well as continue strengthening the risk prevention and control in key areas, striving to create State-owned Enterprise Taiping, Technology Taiping, Healthy Taiping and International Taiping and make the steady progress in building the first-class finance and insurance group with global competitiveness TPL With a focus on protection products, TPL will continue promoting the optimisation of business structure and improving the new business value to ensure the healthy and rapid development of the main business Further reinforce manpower and strengthen talents building to drive business development to enter into a new era Further break the tradition in respect of service support, archive the innovative development and continue creating a customer-oriented service system 43

44 Outlook (Cont d) TPI TPP Proactively response to the new round of motor insurance rates reform, enhance the innovation and professionalism of channels, improve the quotation management capability as well as actively develop the high quality segment of non-motor insurances business to archive a steady growth Continue to promote cost reduction and efficiency improvement, strengthen the cost management and technology empowerment, improve the operating efficiency and the quality of customer service, with an aim to consolidate the profit base and to promote the high quality development Expand, optimise and strengthen the scale of pension assets under management, actively promote the diversified development of pension business, actively deploy the occupational annuity business and strive to achieve the strategy of Competing at an advanced level Continue to optimise the core business structure of group insurance, the business model and operation service, put more efforts in the expansion of worksite marketing channels and intensify the endogenous driving force for the development of the company 44

45 Outlook (Cont d) Overseas Business TPL (HK) further improve the comprehensive management capability, strengthen the channel construction and channel productivity, and actively develop the business in Macao so as to continuously increase the market influence Leveraging national policy benefits, overseas non-life insurance companies expanded local business with greater efforts while intensively developing Chinese interests business to further expand the international influence of Taiping brand CTPI (HK) and TP Macau secure the opportunities under the policies of Guangdong-Hong Kong- Macau Bay Area, actively explore new growth potential to ensure market leadership. TP Singapore, TP UK and TP Indonesia firmly seize the opportunity of The Belt and Road and serve the national strategy of Going Global to proactively provide risk protection and service for Chinese business and strive for greater market competitiveness Reinsurance Business TPRe will continue to promote the global business layout, transform from a market follower to a market leader, pursue comprehensive development in both property & casualty and life insurance with striving for simultaneous growth both in scale and profits TPRe (China) will increase the innovation in reinsurance products and technology, fulfill responsibilities as a state-owned enterprise to play an active role in protecting people s livelihood and continue boosting market influence 45

46 Outlook (Cont d) Investment In the second half of the year, while the global economy continued recovering, and China s economy maintained steady growth, uncertainties increased as trade conflicts strengthened the continued impact on the capital market. Under this background, the Group will pay more attention to the value and prudent of equity investment, give full play to long-term investment advantage of insurance funds and deploy leading enterprises with obvious competitiveness at an appropriate time; continue to increase the allocation efforts of bond investment, pay attention to the long-term returns, optimise the allocation structure and spare no efforts in the duration and variety selection In respect of alternative investment, the main investment strategy is to provide service for the real economy according to national strategies, with priorities to important investment opportunities such as supply-side structural reform, the Belt and Road, Hainan free port and national strategic industrial fund, and at the same time make use of the advantages of comprehensive financial layout and seek for retirement community and medical health high-quality bids which can create synergistic effects to the main business of insurance As for the real estate investment, on the one hand, we will continue to focus on the first-tier cities and high quality office buildings in core areas of some second-tier cities; on the second hand, we will seize policy opportunities to carry out research and deployment in the long-term rental housing investment Following the spirits of the Central Economic Working Conference and National Finance Working Conference, we will proactively prevent and dissolve major risks, especially the credit default risk, carry out checking and ruling out of stock assets repeatedly, make sustained efforts to promote the infrastructure construction of risk control information, adhere to the principle of through to the end, figure out the risk limit and prevent the systematic risks and material risks 46

47 Questions and Answers 47